Portland
Mayor Sam Adams halted work on the proposal six weeks ago amid concerns
that the process was moving too quickly and without answering
fundamental questions: Is this the right investment at the right time?
And if so, what's the cost?

The delay represents a brief but
notable political victory for Multnomah County, where leaders are more
readily challenging the city's tried-and-true redevelopment strategy.
But with the city leaning on urban renewal for economic opportunities,
officials face a dilemma: Should they earmark money amid a lingering
recession to pay for the promise of projects and jobs? Or should they
hold off to backfill government programs that are likely to be put on
the chopping block soon?

View full sizeDavid Badders, The OregonianProposed City Center Urban Renewal Area

The downtown district would mark
Portland's first new urban renewal area in six years and its most
ambitious since plans for the Pearl District and South Waterfront gained
approval in the late 1990s. Only the River District in the Pearl has
more money to spend than the $345 million proposed.

For now, a
spokesman for the Portland Development Commission, the city's urban
renewal agency, said Friday that the plan is on hold until spring or
summer. Shawn Uhlman said local officials want to see how the state
deals with a projected $3 billion shortfall that will affect Multnomah
County and the school district.

The PDC originally suggested the
process should wrap up this year because two 1980s-era downtown urban
renewal districts are spent. Officials have linked the proposed new zone
-- called the Central City Urban Renewal Area -- to long-range plans
for affordable housing, private redevelopment and continued downtown
progress.

But the chairman for Multnomah County, an agency that
would miss out on some property taxes because of the district, said
tradeoffs haven't been properly debated.

"I think this is going
to be determined by the substance," Jeff Cogen said. "If looking deeply
at this, it doesn't make sense, I don't think it's going to happen. And
if it does, then it should. But we haven't done that analysis yet."

Work
on the district began in May 2009. By August of this year, an
evaluation committee referred a "straw" proposal for public review. From
there, the 24-person committee was set to decide whether to forward the
plan to the Portland City Council and PDC for approval by November.

But
officials canceled subsequent meetings, and the project manager told
the committee in an October e-mail that much of the remaining work would
be completed in coordination with Adams.

Cogen -- who a month
earlier had publicly argued with Adams over Sellwood Bridge funding --
responded that he was "mystified" work could be completed in only one or
two more meetings without fundamental questions being discussed.

Four
days after that, Adams announced via Twitter that he had told the PDC
to "slow down the project's timeline because we are headed into a tough
budget season that will consume much of our time." Adams declined to be
interviewed for this story.

Cogen said he was pleasantly surprised by Adams' decision.

"I
think it was the right call," said Cogen, noting that the county loses
out on about $25 million a year because of the city's 11 urban renewal
districts. "I think he was responding to the fact that things have
changed, and he was aware of that."

Urban renewal works by
freezing property taxes within an area for a set timeframe. As values
grow, taxes on the increase are reinvested into the community -- not
into general funds for cities, counties, school districts and other
government agencies.

The proposed boundary, gangly in that it
stretches from Northwest 23rd Avenue to the Morrison Bridge to Duniway
Park -- includes three key redevelopment areas: Lincoln High School,
land near Fourth Avenue championed by PSU, and the Con-way property off
Northwest 21st Avenue. It also includes the downtown shopping district,
which the Portland Business Alliance pushed for.

PSU has big
plans. Lindsay Desrochers, vice president for finance and
administration, said the school envisions 3 million square feet of new
development, most of it privately owned, to satisfy residential and
commercial demands for the campus in coming decades.

"It's very
important from the overall development of this key area of the central
city," she said of the urban renewal plan. "We want to see it get done.
But we will have patience."

Officials for Portland Public
Schools haven't stated a position. Advocates see urban renewal as a tool
toward eventually redeveloping the Lincoln campus. And because of the
way the state pays for schools, the effect of the district on the local
K-12 system would be less than on Multnomah County.

But the loss
of property tax revenue is still a concern, said district lobbyist
David Williams. "We can't necessarily put the cart before the horse on
urban renewal," he said. "We need to figure out how we're going to get
through this budgetary climate."

Members of Adams' evaluation committee said they haven't been told what will happen next.

"I
view the committee as a resource to the city, so I'm not personally
frustrated," said attorney Kirk Hall, one of the members. "However, it
would be a shame to lose the knowledge and expertise we developed. It
would be useful to know which direction we're going."